Well, it seems like Sony vs. George Hotz has ended pretty much without a bang. Sony announced on its Playstation blog that the two parties have settled the case. Under the settlement, Hotz agrees to a permanent injunction fo his jailbreaking hack, but admits to no wrong-doing. A wise and, dare I say it, mature end to the lawsuit.

Hotz settles with Sony, breaking his promise and letting down all those people who donated to him.

Actually, settling was always one of the options Hotz was willing to accept, but he flubbed that one up as well (per his own geohot.com page):

What if SCEA tries to settle?
Lets just say, I want the settlement terms to include OtherOS on all PS3s and an apology on the PlayStation blog for ever removing it. It'd be good PR for Sony too, lord knows they could use it. I'm also willing to accept a trade, a legit path to homebrew for knowledge of how to stop new firmwares from being decrypted.